Your satelite receiver and PS3 is already HD and you do not need any upscaling. If it was in the receiver you'd bypass it any way so it would be a waste. Now if the satelite receiver did not have HDMI then you may need some conversion to go from component input to HDMI output. But this shouldn't be the case. Most of the HD satelite receivers feature a HDMI output.

Here's where the upscaling is necessary in the receiver, if you hook to it a VCR or maybe some other low resolution source which would not have HDMI then the receiver would need to convert it so it would pass out of the receiver via HDMI. You could work around this by going directly to the TV if this was the case though.

What you do need to check is if your receiver's HDMI is fully functionable. Some of these cheezy entry level receivers will only let the video through. This limits you to only optical or coaxial digital audio which does not support the HD audio formats (Tru-HD/DTS-MA) 1.3 is just the current latest version of the HDMI standard. You can find what each version is capable of on the HDMI website. If the HDMI was limited I'd take that receiver back in a heartbeat. If yoou are spending money to get a new receiver get one that does the job correctly. I'm not sure which Yammie to direct you to but the Onkyo SR-TX606 is definitely ready to rock.